Eaton Vance Pennsylvania Municipal Bond Fund
Table of Contents

 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
 
811-21227
Investment Company Act File Number
 
Eaton Vance Pennsylvania Municipal Bond Fund
(Formerly, Eaton Vance Insured Pennsylvania Municipal Bond Fund)
(Exact Name of Registrant as Specified in Charter)
 
Two International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices)
 
Maureen A. Gemma
Two International Place, Boston, Massachusetts 02110
(Name and Address of Agent for Services)
 
(617) 482-8260
(Registrant’s Telephone Number, Including Area Code)
 
September 30
Date of Fiscal Year End
 
December 31, 2009
Date of Reporting Period
 


TABLE OF CONTENTS

Item 1. Schedule of Investments
Item 2. Controls and Procedures
Signatures
EX-99.CERT Section 302 Certification


Table of Contents

 
Item 1. Schedule of Investments


Table of Contents

Eaton Vance Pennsylvania Municipal Bond Fund as of December 31, 2009
 
PORTFOLIO OF INVESTMENTS (Unaudited)
 
Tax-Exempt Investments — 159.0%
 
                 
Principal
           
Amount
           
(000’s omitted)     Security   Value  
Hospital — 9.2%
$ 500    
Lancaster County Hospital Authority, (Lancaster General Hospital), 4.50%, 3/15/36
  $ 457,535  
  125    
Lebanon County Health Facilities Authority, (Good Samaritan Hospital), 6.00%, 11/15/35
    116,326  
  1,455    
Lehigh County General Purpose Authority, (Lehigh Valley Health Network), 5.25%, 7/1/32
    1,441,730  
  750    
Pennsylvania Higher Educational Facilities Authority, (UPMC Health System), 6.00%, 1/15/31
    774,158  
  820    
Philadelphia Hospitals and Higher Education Facilities Authority, (Children’s Hospital), 4.50%, 7/1/37
    759,090  
                 
            $ 3,548,839  
                 
Insured-Electric Utilities — 7.2%
$ 2,060    
Lehigh County Industrial Development Authority, (PPL Electric Utilities Corp.), (FGIC), (NPFG), 4.75%, 2/15/27
  $ 2,040,842  
  750    
Puerto Rico Electric Power Authority, (FGIC), (NPFG), 5.25%, 7/1/35
    736,560  
                 
            $ 2,777,402  
                 
Insured-Escrowed/Prerefunded — 0.8%
$ 270    
Southcentral General Authority, (Wellspan Health), (NPFG), Escrowed to Maturity, 5.25%, 5/15/31
  $ 288,722  
                 
            $ 288,722  
                 
Insured-General Obligations — 30.3%
$ 1,650    
Armstrong County, (NPFG), 5.40%, 6/1/31
  $ 1,659,966  
  1,250    
Bethlehem Area School District, (AGM), 5.25%, 1/15/25(1)
    1,328,150  
  660    
Centennial School District, (AGM), 5.25%, 12/15/37
    686,756  
  1,000    
Central Greene School District, (AGM), 5.00%, 2/15/35
    1,022,040  
  1,000    
Erie School District, (AMBAC), 0.00%, 9/1/30
    340,600  
  500    
Harrisburg School District, (AGC), 5.00%, 11/15/33
    514,680  
  2,555    
McKeesport School District, (NPFG), 0.00%, 10/1/21
    1,517,236  
  1,500    
Norwin School District, (AGM), 3.25%, 4/1/27
    1,294,575  
  1,500    
Reading School District, (AGM), 5.00%, 3/1/35
    1,534,860  
  1,000    
Scranton School District, (AGM), 5.00%, 7/15/38
    1,016,520  
  2,550    
Shaler Area School District, (XLCA), 0.00%, 9/1/33
    717,238  
                 
            $ 11,632,621  
                 
Insured-Hospital — 8.6%
$ 250    
Allegheny County Hospital Development Authority, (UPMC Health System), (NPFG), 6.00%, 7/1/24
  $ 280,525  
  500    
Centre County Hospital Authority, (Mount Nittany Medical Center), (AGC), 6.25%, 11/15/44
    519,690  
  1,620    
Lehigh County General Purpose Authority, (Lehigh Valley Health Network), (AGM), 5.00%, 7/1/35(3)
    1,597,069  
  1,000    
Washington County Hospital Authority, (Washington Hospital), (AMBAC), 5.125%, 7/1/28
    913,440  
                 
            $ 3,310,724  
                 
Insured-Lease Revenue/Certificates of Participation — 4.6%
$ 500    
Commonwealth Financing Authority, (AGC), 5.00%, 6/1/31
  $ 519,000  
  1,215    
Philadelphia Authority for Industrial Development, (One Benjamin Franklin), (AGM), 4.75%, 2/15/27
    1,251,256  
                 
            $ 1,770,256  
                 
Insured-Private Education — 12.7%
$ 1,000    
Chester County Industrial Development Authority, Educational Facility, (Westtown School), (AMBAC), 5.00%, 1/1/31
  $ 1,003,770  
  1,675    
Pennsylvania Higher Educational Facilities Authority, (Drexel University), (NPFG), 5.00%, 5/1/37
    1,690,008  
  1,755    
Pennsylvania Higher Educational Facilities Authority, (Temple University), (NPFG), 4.50%, 4/1/36
    1,671,743  
  500    
Pennsylvania Higher Educational Facilities Authority, (University of the Sciences in Philadelphia), (AGC), 5.00%, 11/1/37
    509,625  
                 
            $ 4,875,146  
                 
 
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Principal
           
Amount
           
(000’s omitted)     Security   Value  
Insured-Public Education — 11.2%
$ 500    
Lycoming County Authority, (Pennsylvania College of Technology), (AGC), 5.50%, 10/1/37
  $ 519,775  
  1,200    
Lycoming County Authority, (Pennsylvania College of Technology), (AMBAC), 5.25%, 5/1/32
    1,137,972  
  1,000    
Pennsylvania Higher Educational Facilities Authority, (Clarion University Foundation), (XLCA), 5.00%, 7/1/33
    819,520  
  500    
State Public School Building Authority, (Delaware County Community College), (AGM), 5.00%, 10/1/27
    531,560  
  375    
State Public School Building Authority, (Delaware County Community College), (AGM), 5.00%, 10/1/29
    394,110  
  875    
State Public School Building Authority, (Delaware County Community College), (AGM), 5.00%, 10/1/32
    904,207  
                 
            $ 4,307,144  
                 
Insured-Sewer Revenue — 17.7%
$ 300    
Allegheny County Sanitation Authority, (BHAC), (FGIC), 5.00%, 12/1/32
  $ 309,360  
  1,500    
Allegheny County Sanitation Authority, (BHAC), (NPFG), 5.00%, 12/1/22
    1,595,760  
  1,000    
Ambridge Borough Municipal Authority, Sewer Revenue, (AGM), 4.60%, 10/15/41
    928,180  
  1,920    
Erie Sewer Authority, (AMBAC), 0.00%, 12/1/26
    797,722  
  1,555    
Erie Sewer Authority, Series A, (AMBAC), 0.00%, 12/1/25
    686,875  
  2,155    
Erie Sewer Authority, Series B, (AMBAC), 0.00%, 12/1/25
    951,906  
  1,500    
University Area Joint Authority, (NPFG), 5.00%, 11/1/26
    1,503,795  
                 
            $ 6,773,598  
                 
Insured-Special Tax Revenue — 16.1%
$ 4,075    
Pittsburgh and Allegheny County Public Auditorium Authority, (AMBAC), 5.00%, 2/1/29(2)
  $ 3,929,156  
  24,665    
Puerto Rico Sales Tax Financing Corp., (AMBAC), 0.00%, 8/1/54
    1,415,524  
  1,770    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/44
    211,674  
  3,520    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45
    393,290  
  2,220    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/46
    230,281  
                 
            $ 6,179,925  
                 
Insured-Transportation — 20.5%
$ 2,000    
Allegheny County Port Authority, (FGIC), (NPFG), 5.00%, 3/1/25
  $ 2,033,100  
  1,000    
Allegheny County Port Authority, (FGIC), (NPFG), 5.00%, 3/1/29
    1,011,590  
  2,075    
Pennsylvania Turnpike Commission, (AGM), 5.25%, 7/15/30
    2,332,943  
  295    
Philadelphia, Airport Revenue, (AGC), 5.375%, 6/15/29
    311,381  
  2,100    
Puerto Rico Highway and Transportation Authority, (AGC), (CIFG), 5.25%, 7/1/41(3)
    2,160,858  
                 
            $ 7,849,872  
                 
Insured-Utilities — 4.6%
$ 1,970    
Philadelphia Gas Works Revenue, (AMBAC), 5.00%, 10/1/37
  $ 1,771,188  
                 
            $ 1,771,188  
                 
Insured-Water and Sewer — 0.4%
$ 150    
Saxonburg Water and Sewer Authority, (AGC), 5.00%, 3/1/35
  $ 151,416  
                 
            $ 151,416  
                 
Insured-Water Revenue — 6.7%
$ 1,150    
Pennsylvania Economic Development Financing Authority, (BHAC), 5.00%, 10/1/39
  $ 1,163,190  
  1,530    
Philadelphia Water and Wastewater, (AMBAC), 4.25%, 11/1/31
    1,404,418  
                 
            $ 2,567,608  
                 
Private Education — 7.6%
$ 2,900    
Pennsylvania Higher Educational Facilities Authority, (University of Pennsylvania), 4.75%, 7/15/35
  $ 2,917,487  
                 
            $ 2,917,487  
                 
Senior Living/Life Care — 0.5%
$ 200    
Montgomery County Industrial Development Authority, (Foulkeways at Gwynedd), 5.00%, 12/1/24
  $ 191,868  
                 
            $ 191,868  
                 
 
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Principal
           
Amount
           
(000’s omitted)     Security   Value  
Special Tax Revenue — 0.3%
$ 110    
Virgin Islands Public Finance Authority, 6.75%, 10/1/37
  $ 115,936  
                 
            $ 115,936  
                 
         
Total Tax-Exempt Investments — 159.0%
(identified cost $62,806,302)
  $ 61,029,752  
         
         
Auction Preferred Shares Plus Cumulative Unpaid Dividends — (56.6)%
  $ (21,726,196 )
         
         
Other Assets, Less Liabilities — (2.4)%
  $ (918,366 )
         
         
Net Assets Applicable to Common Shares — 100.0%
  $ 38,385,190  
         
 
             
The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.
         
AGC
  -   Assured Guaranty Corp.
         
AGM
  -   Assured Guaranty Municipal Corp.
         
AMBAC
  -   AMBAC Financial Group, Inc.
         
BHAC
  -   Berkshire Hathaway Assurance Corp.
         
CIFG
  -   CIFG Assurance North America, Inc.
         
FGIC
  -   Financial Guaranty Insurance Company
         
NPFG
  -   National Public Finance Guaranty Corp.
         
XLCA
  -   XL Capital Assurance, Inc.
 
The Fund invests primarily in debt securities issued by Pennsylvania municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at December 31, 2009, 88.9% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution ranged from 2.5% to 27.6% of total investments.
         
(1)
      When-issued security.
         
(2)
      Security (or a portion thereof) has been segregated to cover payable for when-issued securities.
         
(3)
      Security represents the underlying municipal bond of an inverse floater.
 
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A summary of financial instruments outstanding at December 31, 2009 is as follows:
 
Interest Rate Swaps
 
                                 
          Annual
    Floating
  Effective Date/
     
    Notional
    Fixed Rate
    Rate
  Termination
  Net Unrealized
 
Counterparty   Amount     Paid By Fund     Paid To Fund   Date   Appreciation  
Barclays Bank PLC
  $ 3,000,000       4.220 %   3-month USD-
LIBOR-BBA
  July 27, 2010 /
July 27, 2039
  $ 154,021  
JPMorgan Chase Co. 
    725,000       4.097     3-month USD-
LIBOR-BBA
  March 15, 2010 /
March 15, 2040
    56,451  
                                 
                            $ 210,472  
                                 
 
The effective date represents the date on which the Fund and the counterparty to the interest rate swap contract begin interest payment accruals.
 
At December 31, 2009, the Fund had sufficient cash and/or securities to cover commitments under these contracts.
 
The Fund is subject to interest rate risk in the normal course of pursuing its investment objectives. Because the Fund holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. To hedge against this risk, the Fund may enter into interest rate swap contracts.
 
At December 31, 2009, the aggregate fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in an asset position and whose primary underlying risk exposure is interest rate risk was $210,472.
 
The cost and unrealized appreciation (depreciation) of investments of the Fund at December 31, 2009, as determined on a federal income tax basis, were as follows:
 
         
Aggregate cost
  $ 61,008,750  
         
Gross unrealized appreciation
  $ 864,837  
Gross unrealized depreciation
    (2,703,835 )
         
Net unrealized depreciation
  $ (1,838,998 )
         
 
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
 
  •   Level 1 — quoted prices in active markets for identical investments
 
  •   Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
 
  •   Level 3 — significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments)
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
 
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At December 31, 2009, the inputs used in valuing the Fund’s investments, which are carried at value, were as follows:
 
                                 
    Quoted Prices in
                   
    Active Markets for
    Significant Other
    Significant
       
    Identical Assets     Observable Inputs     Unobservable Inputs        
       
Asset Description   (Level 1)     (Level 2)     (Level 3)     Total  
 
 
Tax-Exempt Investments
  $     $ 61,029,752     $     $ 61,029,752  
 
 
Total Investments
  $     $ 61,029,752     $     $ 61,029,752  
 
 
Interest Rate Swaps
  $     $ 210,472     $     $ 210,472  
 
 
Total
  $     $ 61,240,224     $     $ 61,240,224  
 
 
 
The Fund held no investments or other financial instruments as of September 30, 2009 whose fair value was determined using Level 3 inputs.
 
For information on the Fund’s policy regarding the valuation of investments and other significant accounting policies, please refer to the Fund’s most recent financial statements included in its semiannual or annual report to shareholders.
 
Effective February 1, 2010, the name of the Fund was changed from Eaton Vance Insured Pennsylvania Municipal Bond Fund.
 
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Item 2. Controls and Procedures
 
(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant on this Form N-Q has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant on this Form N-Q has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.
 
(b) There have been no changes in the registrant’s internal controls over financial reporting during the fiscal quarter for which the report is being filed that have materially affected, or are reasonably likely to materially affect the registrant’s internal control over financial reporting.


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Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Eaton Vance Pennsylvania Municipal Bond Fund
 
         
By:
  /s/ Cynthia J. Clemson    
         
    Cynthia J. Clemson    
    President    
         
Date:
  February 22, 2010    
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
         
By:
  /s/ Cynthia J. Clemson    
         
    Cynthia J. Clemson    
    President    
         
Date:
  February 22, 2010    
         
By:
  /s/ Barbara E. Campbell    
         
    Barbara E. Campbell    
    Treasurer    
         
Date:
  February 22, 2010